Correlation Between Direxion Daily and Aethlon Medical

Can any of the company-specific risk be diversified away by investing in both Direxion Daily and Aethlon Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Direxion Daily and Aethlon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Direxion Daily Semiconductor and Aethlon Medical, you can compare the effects of market volatilities on Direxion Daily and Aethlon Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Direxion Daily with a short position of Aethlon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Daily and Aethlon Medical.

Diversification Opportunities for Direxion Daily and Aethlon Medical

0.83

Correlation Coefficient

Direxion Daily  Aethlon Medical

Very poor diversification

The 3 months correlation between Direxion and Aethlon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Daily Semiconductor and Aethlon Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aethlon Medical and Direxion Daily is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Direxion Daily Semiconductor are associated (or correlated) with Aethlon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aethlon Medical has no effect on the direction of Direxion Daily i.e., Direxion Daily and Aethlon Medical go up and down completely randomly.

Pair Corralation between Direxion Daily and Aethlon Medical

Given the investment horizon of 90 days Direxion Daily Semiconductor is expected to generate 0.62 times more return on investment than Aethlon Medical. However, Direxion Daily Semiconductor is 1.62 times less risky than Aethlon Medical. It trades about -0.22 of its potential returns per unit of risk. Aethlon Medical is currently generating about -0.15 per unit of risk. If you would invest  1,728  in Direxion Daily Semiconductor on May 5, 2025 and sell it today you would lose (927.00) from holding Direxion Daily Semiconductor or give up 53.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Direxion Daily Semiconductor  vs.  Aethlon Medical

Direxion Daily Semic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Aethlon Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aethlon Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Direxion Daily and Aethlon Medical

The main advantage of trading using opposite Direxion Daily and Aethlon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direxion Daily position performs unexpectedly, Aethlon Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aethlon Medical will offset losses from the drop in Aethlon Medical's long position.

The idea behind Direxion Daily Semiconductor and Aethlon Medical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.